By Mike Gratton on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs
As one of the world’s biggest franchise companies, this query comes up a lot across all the brands at MBE Worldwide.
While both paths have their unique advantages and challenges, the right choice really depends on your personal goals, resources, and exactly what you want to get from running your own business. Let’s dive into the key factors to consider.
The franchise route
Pros:
Established brand: One of the biggest advantages of buying a franchise is the instant recognition and trust that comes with an established brand. Though your own entrepreneurial spirit is still required, this immediate head-start can significantly reduce the time and effort needed to attract customers compared to launching all on your own.
Proven model: Franchises come with a tested business model, which means you can avoid many of the pitfalls that new businesses face. The franchisor provides a blueprint for success, including marketing strategies, operational procedures, and product offerings.
Support and training: Franchisors typically offer extensive training and ongoing support to franchisees. This can be invaluable, especially if you’re new to the industry or business ownership in general. As well as the franchisor itself, you will also have existing franchisees to learn from.
Easier financing: Lenders are often more willing to finance a franchise because of the lower risk associated with an established brand and proven business model.
Cons:
Initial and ongoing costs: While the franchise route provides these clear advantages, nothing comes for free. An investment is still required. This usually comes in the form of an initial franchise fee, as well as ongoing royalties and/or marketing fees. As a franchisee, you will need to commit to growth strategies and work with your franchisor to ensure profitability levels that cover your investment.
Limited flexibility: Are you a team player of a maverick at heart? As a franchisee, you’ll need to adhere to the franchisor’s rules and guidelines. While working with the franchisor should provide a proven path to success, some personality-types can find this approach frustrating. So, if you’d rather do everything your own way, a franchise might not be for you.
Shared reputation: Your business’ reputation is tied to the franchisor and other franchisees. If the brand faces negative publicity, it can affect your business, even if you’re not directly involved. So choosing a franchisor with a long and successful history, and a good reputation, is essential.
Going solo
Pros:
Complete control: When you start your own business from scratch, you have the freedom to make all the decisions. You can create your own brand, develop unique products or services, and implement your own business strategies.
More flexible initial costs: Starting a business totally alone means you can be more footloose with how you invest your money. If you can get that right, you have the flexibility to control your expenses and scale your business at your own pace, with less pressure to meet the specific growth targets that come with a franchise investment.
No rules: While buying a franchise may offer greater assurances of success for an individual business, it can often come with some restrictions, such as only being able to work in certain territories, meaning expansion has a limit unless you invest in a new territory. Going solo though, means the only rules are the ones you make for yourself.
Self actualisation: Building a business from the ground up can be incredibly rewarding, whether franchise or solo. But if it’s really important to you that your name is above the door of your achievements, and that the end business is entirely imbued with your own personality, going solo rather than franchising is probably the better option for you.
Cons:
Higher risk: Starting a new business on your own involves more risk. Without an established brand or proven business model, you’ll need to work harder to attract customers and establish your reputation. Building a brand from nothing can end up being a much biggest investment for you than buying into an established brand. With no proven model, it’s a big risk for anyone to take.
Lack of support: Unlike a franchise, you won’t have a franchisor to provide training, support, or a network of fellow franchisees. You’ll need to rely on your own resources and seek out mentors or advisors independently – or to put total faith in your own abilities, decisions and instincts.
Learn by your own mistakes: Franchises offer proven methodologies, which have been shown to deliver success time-and-time again for those who follow the process. Building a business from the bare ground not only requires a significant investment of time and effort, but you’re all on your own, at all times, required to wear many hats and you need to be prepared for a steep, possibly harsh, learning curve.
Making the decision
Ultimately, the decision to buy a franchise or go solo depends on your personal preferences, financial situation, and long-term goals. If you value support, a proven business model, and brand recognition, a franchise might be the right choice. However, if you crave independence, creativity, and the potential for rule-free growth, with your own name on everything you do, starting your own business totally alone could be more fulfilling.
Take the time to research both options thoroughly, consider your strengths and weaknesses, and seek advice from experienced entrepreneurs. Whichever path you choose, remember that success in business requires dedication, hard work, and a willingness to adapt and learn.
MBE Worldwide is the world’s leading postal and shipping services franchise group, serving over one million business customers a year through its multi-brand operations, which include Mail Boxes Etc., PACK & SEND and World Options.
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Mike Gratton, Khareem Sudlow
